Netflix meant movies. Before internet streaming was a reality, Netflix delivered movies to your home, with no late fees, no hassles and they had the library that no one else had. They killed Blockbuster. They killed the corner video store. They were the king of the movies at home business- and their stock price showed it.
Along with Amazon and Apple and Google and even OKcupid- Netflix had built the most incredible profile of their customers needs, wants and desires. They were trusted to recommend movies- and their recommendations were great. They were the site for the movie lover.
First error was eliminating user generated content on the site. All the debates about movies- all the amateur reviewers- all got booted. This should have been the warning sign that the people in charge cared more about moola than movies.
Then came the price hikes. Not only were they big- they also started charging premiums for Blu-ray. But, we all know that the post office is going bankrupt because of companies like Netflix taking advantage of their horrible pricing structure.
Now the doozie- forget the idea of being your one stop for film, Netflix is going to split into two units: a streaming service that gets to hold onto the brand “Netflix” and the delivery of DVD service that becomes- get this “Qwikster” (not to be confused with a ton of other similar brands). Yep, the movie lover has to split their account between two services: a streaming- the one where you can watch whatever strikes your fancy when the disk you have isn’t quite right- or in transit, or the library that has everything.
The reality is the streaming service can be offered by anyone- including the studios. Netflix was recently dealt a huge blow when Starz pulled their library. Amazon, Apple, Hulu all can do the exact same thing. Where is the differentiation of Netflix?
The DVD library brand- Qwikster- gets the red envelope. A brand new brand- that does the same thing as before. Where is the value there?
The responses from consumers, the people who own the brand (because companies that think they still own their own brands are idiots) have voted this split down and ranted against it. The stock price has been tumbling. A bigger disaster than New Coke? Or “Herb the nerd” in the making?
Or is it just brand suicide?
If there is one lesson to be learned from this move- is that you may not be in the business you think you are in. Netflix believes they are in the movie delivery business- when in fact, they were in the ultimate movie store clerk who could hook you up with the perfect movie every night. Unfortunately- someone just fired the clerk.
You can watch the CEO of Netflix introducing the new service- fail:
I will admit, I’m a music videos junky But lately, it seems like all music videos produced by major-label artists are lacking a certain charm. Super high-budget videos with a boring premise, often consisting of the artist performing in a surreal location. Which is fine for the hottest artists who are going to get views regardless of what content they put out.
But occasionally, a music video comes out that is original, memorable, and appeals to a large audience while still having a living, breathing charm.
Enter: Swedish House Mafia’s video for “Save The World” (bet you’d never heard of them or their music before)
Other artists and directors should take notes, because this video does what a video should; it tells a story, it’s funny, it’s well-produced, it’s memorable, it’s charming, and it gets people talking. Oh, and did I mention that it has over 25 million views? It was uploaded in May, which means that it gets over well a million views per week.
This is a perfect example of marketing through viral videos. Think about it, the whole point of a music video is to promote a musical artist, so it’s basically the same as a commercial. The key is to create a “commercial” that gets people talking, entertains them, and most importantly makes them forget that they are watching a commercial!
Oh, and by the way. I’m Max. I do video work at The Next Wave. Pleased to meet you.
Ever since Chris Anderson published “The Long Tail” it’s been argued about. Anderson himself is still trying to redefine what the market is- and how it’s measured. Does Netflix count as part of the category “video rental stores” or not. You can read some of his analysis in this article- where he takes some time to talk about the poor debunked Italian mathematician Vilfredo Parteto:
I am as guilty as, well, nearly everyone else of sloppily defining the “80/20 Rule” to mean whatever I want. Pareto’s principle really is an all-purpose widget, broadly applicable to almost anything humans do (and, of course, the behavior of atoms in a Bose-Einstein condensate)…
The general articulation of the principle is: “for many phenomena 80% of consequences stem from 20% of the causes.” (Vilfredo Pareto [shown] first articulated this in 1906 when he noticed that 80% of the property in Italy was owned by 20% of its population).
In a world of category killers- and mega stores like WalMart- the small business has to work harder to find and define the scraps left over of which to build a business model on. When almost any commodity can be sourced at the touch of a button, service has become the number one way of differentiating your business.
There is hope to be found in finding the niche that 20% of the market needs filled. Not every hit has to be a homerun for your business to build and grow, just one thing becomes essential- making sure you are able to come in first with top of mind awareness for your little bit of the pie.
Businesses that can tell their story better, can connect with a small segment of customers well- that have figured out that infinite choices are too many- that they want to do business with people they know best- those are the ones that have a chance.
We’ve been watching a small old Wympee building that seats 35 at most- be turned into a hipster dive, by focusing on a message that big can’t own- that their food is local, organic and fresher than anything anyone else can provide. In the highly competitive market where size seems to matter, being small is working as a competitive advantage.
Thinking in terms of the 80/20 rule- it doesn’t matter if 80% of your business comes from 20% of your customers- as long as you have enough customers to make your model work.
Netflix meant movies. Before internet streaming was a reality, Netflix delivered movies to your home, with no late fees, no hassles and they had the library that no one else had. They killed Blockbuster. They killed the corner video store. They were the king of the movies at home business- and their stock price showed it.
Now the doozie- forget the idea of being your one stop for film, Netflix is going to split into two units: a streaming service that gets to hold onto the brand “Netflix” and the delivery of DVD service that becomes- get this “Qwikster” (not to be confused with a ton of other similar brands). Yep, the movie lover has to split their account between two services: a streaming- the one where you can watch whatever strikes your fancy when the disk you have isn’t quite right- or in transit, or the library that has everything.